14 April 2014 11:36 [Source: ICIS news]
Focus article by Helena Strathearn
LONDON (ICIS)--While demand in the European acrylates sector is certainly maintaining a steady level, it is yet to show the usual uptick that is typical for April - and it now seems that most players have their hopes pinned on a post Easter pick-up.
Demand is largely in line with that seen at the same time last year, but buyers and sellers say there is an element of excitement lacking.
“There's not much noise but the activity is there,” one producer said.
European weather conditions have been better than early spring 2013, lending support to the coatings and construction industries, and GDP forecasts are more positive, which has renewed some confidence among players, but there is a sense of uncertainty in the market.
“For me it's an uncomfortable feeling because it seems as if the peak that we all wait for seems to not be coming,” another producer said. “Demand is acceptable, but not in line with what you would expect today.”
The economy and geopolitical concerns are likely reasons for the slight unease, a couple of sources said, while others said it was difficult to pinpoint the reasons for the subdued mood.
“Nobody knows - that's the painful part - why it's not taking off,” the producer added.
Demand had been decent through most of the first quarter and appeared to be a promising indicator, but sources said buying interest had plateaued since around the end of March.
The producer added: “The weather has been warm. [Customers are] taking contractual volumes. But you would expect additional demand. I think we are slightly above last year but to me it's less evident than the signals we had about 2014 during EPCA [in October 2013] when people were more positive.
"For us it's a little bit better, but not convincingly - yet. After Easter, things should change…if not, then I don't know.”
It is not clear which direction European April acrylic acid (AA) and acrylate esters contract prices will settle, but with negotiations set to conclude this week, players deem a rollover to a small increase likely.
Europe March AA contract prices rolled over on the low end and increased by €20/tonne on the high end of the ICIS range from February on margin recovery, following the rollover in the March feedstock propylene contract price.
Contract prices are at €1,870-1,910/tonne FD (free delivered) NWE (northwest Europe).
AA is a key intermediate chemical used in the production of acrylic esters and resins. Ethyl acrylate, butyl acrylate, methyl acrylate, and 2-ethylhexyl acrylate are polymerised to become ingredients in paints, coatings, textiles, adhesives, polishes, and plastics.
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